By Rachael Sokari

Contract negotiation is the process of achieving an agreement on a set of legally binding terms. When two companies negotiate, they both seek to secure the best deal and minimize their financial, legal, and operational risks. DelonApps is the leading provider of contracting and negotiation services in Nigeria.  Our services include out-of-court settlements, partnership negotiation, business negotiation, staff rationalization, severance negotiation, human resource management, and contract negotiation. Our clients include both local and international enterprises in the oil and gas, information technology, outsourcing and other sectors in Nigeria.

We have experience helping multiple multinational companies successfully negotiate severance packages with staff and out-of-court settlements that had lasted seven to ten years. DelonApps is currently providing services to big banks, international oil companies, and financial technology companies in Nigeria. Our services are outstanding because of our the following values:

• Integrity – clients trust that we’re always honest and factual

• Objectivity and fairness – while negotiating with multiple parties, we carefully listen and propose solutions from the fairest points of view

• Competence – our team is made up of highly experienced negotiators and lawyers with local and international experience

When negotiating contracts with vendors, for example, your organization may insist on being able to pay on a monthly rather than annual basis (or vice versa). There isn’t necessarily a “right” option in payments, as there is in many other situations, but there is an alternative that makes the most sense for your organization. In business, we negotiate contracts to ensure that our agreements position our businesses for long-term success. With a wide array of client example scenarios, DelonApps recently assisted a company in disengaging redundant employees, and we assisted in negotiating employment termination and benefits, as well as disbursement of payment to employees and administration of capital gain tax with deductions and remittance within two months. Also, a foreign corporation also had a ten-year legal battle with a Nigerian vendor. Within a month, we assisted in the negotiation of an out-of-court settlement deal.

Contract negotiation is a crucial part of contract administration. Delays in contract development or execution, for example, can slow a business down, but they are unlikely to have a significant influence on its bottom line. A badly handled negotiation, on the other hand, can leave a corporation with long-term legal responsibilities.

In typical negotiations, such as those over a software license, topics such as governing law, customer data processing, information security, and price are discussed. The back-and-forth can take place in real-time (during a phone call or in-person meeting), but email is more prevalent, and the dynamics are the same in both cases. Both sides make compromises, inserting, removing, or modifying contract sections – the contract’s building blocks — until the two sides reach an agreement.

Knowledge management and process management are the keys to contract negotiation: if you don’t know the history and status of each of your contract negotiations, you can’t be sure you’re getting the best deal for your company.

Legal teams usually spend the majority of their time putting together contract changes from various business teams and tracking down the most recent versions of contracts due to the lack of a centralized mechanism for contract tracking and negotiation. Organizations with quarterly sales cycles face a far more difficult situation.

As a result, contract negotiation is a difficult task for legal teams and contract technologies due to the importance of the business, operational complexity, an unequal number of contracts.

Our contracting and negotiating professionals in Nigeria work quickly to ensure that all parties engaged in your contract talks are satisfied. Because we strive to provide our clients with the greatest possible results, it’s never a win for us unless it’s a win-win for you.

Great prices don’t always imply excellent service, and excellent service doesn’t have to be expensive. Our strategic sourcing and contract negotiation professionals can guide you through the complexities of contracting and negotiations, not only evaluating the offered terms and conditions but also comparing them to others in the market to reach a mutually suitable agreement. Our staff is made up of lawyers and negotiation professionals that have extensive expertise in offering out-of-court settlements to foreign companies in Nigeria, including those in the Fintech, IT, and Oil & Gas industries.

Our Contracting and Negotiation Services include:

• A thorough review of the proposed contract

• A review of pricing terms, conditions and service terms

• Proposed resolutions to disagreements in terms and conditions

• A comparison to other similar contracts in the marketplace

• Finding the meeting point that leaves both the supplier and buyer satisfied  with the contract

Benefits of Our Contract Negotiation Services

The many advantages of our contract procurement process include:

• Comprehensive Review of terms and conditions: Inconsistent purchasing practices and the failure to secure competitive rates are common symptoms of insufficient contract management. We will execute a complete review of all contract terms that involve pricing, conditions, compliance, supplier service obligations and performance metrics of purchasers and suppliers. We’ll ensure you are working with reliable, reputable suppliers, and if necessary, help you locate more suitable vendors.

• Marketplace comparison: A reliable method for evaluating the fairness of a contract is comparing its terms and conditions with similar arrangements in the same vertical market. We will analyze your contract to ensure that it is marketplace competitive and sustainable for the long term.

• Conflict resolution steps: Conflicts can arise during the performance of even a well-drafted contract. We will ensure the implementation of appropriate measures to resolve disputes equitably and expeditiously.

• Identifying the meeting point: The most successful negotiations are those where the parties can achieve a meeting of the minds. Our skilled, experienced negotiators have the savvy to identify the most pressing needs of each side and find the means to bring them together.

Why Choose a Professional Contract Negotiator?

DelonApps’ Law and Negotiation professionals in Nigeria know procurement contracts through and out, thanks to our many years in the field. We’re well-versed in industry jargon and have the data needed to assess whether your present rates are competitive. We can even uncover new procurement routes that give a better cost or negotiate on your behalf to acquire a more fair price if necessary. Our skilled contract negotiator can assist you with the following contract terms:

• Pricing: DelonApps enables you to secure a reasonable procurement spend price and avoid mismanaged procurement spend. We’ll make sure you have standardized control and contractors for production, overhead and general supplies.

• Clear conditions: We help our clients get contracts that have clear price protections, payment terms and delivery schedules. We’ll even create competing contracts if necessary.

• Compliance: You can be sure that the contract you get is compliant with every regulation and standard in your industry while still staying at a profitable price point for you. We have experience working with contracts in the Fintech, IT and Oil & Gas industries.

• Keep roles clear: We make sure that your contract has clear sections regarding material losses, insurance, confidentiality and rights of access. We turn the balancing act of contract negotiation into a clear art and ensure that every role has its own dedicated contract section for clarity.

Services for Fact-Based Negotiation

Negotiations for smart contracts are systematic and data-driven. Companies require a competent market research team to traverse the supply chain landscape and deliver the facts when it comes to decreasing costs, driving sales, and building category management strategies. DelonApps has the market intelligence required to conduct intelligent out-of-court settlement agreements. Years of experience implementing strategic sourcing best practices and out of court settlements for top international companies in FinTech, IT, and Oil and Gas industries, along with our own contract database and market research team, gives our clients real-time information on the competition, supply trends, contract terms, price points, and the supplier community. We’ll take the guesswork out of your next procurement investment, allowing you to stay competitive and save money.

Contract Negotiations That Benefit Both Parties

DelonApps has negotiated a substantial amount of contracts and has a database of contract terms, conditions, and price points that may be leveraged to help our customers save money immediately. Our database of rates, contracts, and terms helps us get significant results rapidly when negotiating new contracts for our clients.

Market Intelligence

Due to a lack of relevant data, procurement departments frequently ‘trust their intuition’ or keep inefficient supplier relationships ‘simply because.’ With years of experience, DelonApps has amassed an unrivaled collection of best practices and real-time information. This means we’re in a unique position to help you with contract negotiations and other aspects of the sourcing process both locally (within Nigeria) and internationally as well.

Regular Problems faced in Contract Negotiations

Contract negotiation should be positively beneficial to both parties in every area to achieve an equitable and fair deal. As a well-negotiated contract lays down a solid foundation for a long-term relationship between both parties.

• When it comes to large-scale projects and government transactions, developing countries encounter several complexities and obstacles. A well-negotiated contract is essential not only for the parties to properly fulfill their current duties but also for the future. By identifying the basic elements, the contract should be carefully specified and regulated. This is the primary reason for the necessity for fine-tuned negotiation in growing markets in developing countries.

• Conflicts that arise out of contract lead to expensive arbitration or lawsuits, the costs involved in arbitration and litigation are huge. The arbitral awards could amount to huge losses which could totally disrupt the project and the business‘s financial stability and reputation. This is one of the main reasons for the failure of many start-up companies.

• In most of cases one of the parties has more bargaining power than the other. The weaker party struggles to reach on equal footing during negotiation. Which ultimately creates friction in the weaker party’s mind even before the start of the contract.

• While negotiating the contract, interested parties must take into consideration the recurring rapid changes occurring in the outside world. which are also vital factors as these crucial details could change the scope of negotiations and therefore must not be missed.

Common types of contracts in Nigeria

Out-of-court settlement

Out-of-court settlement is a process by which litigants resolve their disputes amicably without the involvement of a court judge. The courts in Nigeria encourage out-of-court settlement because it is cost-effective and saves time. Out-of-court settlements are obtained through conciliation, mediation, arbitration, or out-of-court negotiation, In the case of an out-of-court settlement, the dispute´s parties must settle out of court. Afterwards, assisted by their due legal representatives, they will file a brief to the Court requesting the stay of the procedure. Such stay may not exceed 60 days, in the case of the small claim’s proceedings. And, for the enforcement proceedings, the period of stay may be freely agreed upon by the parties. To begin, the parties must present the agreement in court through their representatives for it to be sanctioned. The judge must ensure that the parties’ or their duly accredited representatives’ legal capacity and power of disposal are met. Once this is completed, the judge will issue an order approving the transaction.

Reseller and distribution agreement

A reseller and distribution agreement is a written contract that defines the terms and conditions of the manufacturer or supplier’s relationship with the distributor. Usually, the distribution agreement specifically governs the relationship between the reseller and the distributor. The standard terms and conditions of the reseller will govern the terms under which the products are sold and purchased between the two parties. As a result, the two documents must interact, and it is critical that the distributor thoroughly reviews and comprehends the specific terms and conditions. As a result, commercial legal advice should always be sought. it is imperative that the terms of a distribution agreement are clearly set out and cover all the pertinent issues to avoid potential confusion and litigation in the future, and to ensure that the terms agreed comply with the Nigerian laws. So, it’s sensible to obtain legal advice on the drafting and negotiation of a distribution agreement.

Pricing

In a price negotiation, the buyer may appear to have only two options: accept the price or lose the deal. However, sellers are also concerned about losing the sale. The obvious best alternative to a negotiated agreement in both cases is to walk away from the deal. There is, however, almost always room for bargaining. Your best alternative to a negotiated agreement also aids in determining your reservation price—the most you’d be willing to pay in the current negotiation. Interestingly, research suggests that in single-issue price negotiations, asking a counterpart to compare your offer to the bare minimum they’ll accept can help you not only get a good deal but also ensure they’re happy with the outcome. When we compare offers, they appear more appealing.

Service level agreement

A service-level agreement defines the level of service expected by a customer from a supplier, laying out the metrics by which that service is measured, and the remedies or penalties, if any, should the agreed-on service levels not be achieved. Service-level agreements are typically entered into between companies and external suppliers, but they can also be entered into between two departments within a company. Most service providers have standard service level agreements that reflect various levels of service at various prices — this can be a good place to start when negotiating. The service level agreement should include not only a description of the services to be provided and their expected service levels, but also metrics for measuring the services, the duties and responsibilities of each party, and any remedy.

Joint venture agreement

A joint venture agreement is a business entity formed by two or more parties to complete a specific task or achieve a business goal while maintaining their separate identities. Companies form joint ventures for a variety of reasons, including access to a new emerging market, increased profit margins from combining assets and operations, access to skills and capabilities, and risk sharing for major investments or projects. This concept resembles a partnership in which all risks, finances, and profits are shared. The duration is what distinguishes a partnership from a joint venture contract. A partnership exists for as long as possible, whereas a joint venture is terminated once the purpose for which it was formed has been fulfilled. Steps to a Joint Venture Contract in Nigeria include defining the business strategy to be undertaken; selecting the partners after due diligence in checking their credentials; developing a joint venture deal that negotiates all terms and conditions; planning; and execution of the Joint Venture Contract. A distinct feature of a Joint Venture is that it is for a limited time; for example, in the oil and gas supply business, once the purpose is achieved, liabilities are discharged, and profit is shared, the venture is terminated.

International business agreement

International contracts are legally binding agreements between parties based in different countries that require them to do or refrain from doing certain things. Formal international contracts can be written. Most businesses create contracts in writing to make the terms of their agreements clear, and they frequently seek legal advice when drafting important contracts. Contracts can cover any aspect of international trade, but the most common are as follows:  

• International sale contract.

• International distribution contract.

• International agency Contract.

• International sales representative contract.